Senate Bill S8697

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8697
 
                             I N  S E N A T E
 
                              January 7, 2026
                                ___________
 
 Introduced  by  Sen.  ASHBY  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 AN ACT to amend the state finance law, in  relation  to  dependent  care
   flexible benefits
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The state finance law is amended by adding a new article 17
 to read as follows:
                                ARTICLE 17
                     DEPENDENT CARE FLEXIBLE BENEFITS
 SECTION 245. DEFINITIONS.
         246. DEPENDENT CARE FLEXIBLE BENEFITS.
   § 245. DEFINITIONS. FOR THE PURPOSES OF THIS  ARTICLE,  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "EMPLOYER"  SHALL  MEAN  A PERSON OR ENTITY ENGAGED IN A BUSINESS,
 INDUSTRY, PROFESSION, TRADE, OR OTHER  ENTERPRISE  IN  NEW  YORK  STATE,
 WHETHER FOR PROFIT OR NOT FOR PROFIT, THAT:
   (A)  HAS  AT  ALL  TIMES DURING THE PREVIOUS CALENDAR YEAR EMPLOYED AT
 LEAST ONE HUNDRED EMPLOYEES IN THE STATE;
   (B) HAS BEEN IN BUSINESS FOR AT LEAST TWO FULL YEARS; AND
   (C) HAS NOT OFFERED A DEPENDENT CARE FLEXIBLE SPENDING  ACCOUNT  UNDER
 SECTION 129 OF THE INTERNAL REVENUE CODE IN THE PRECEDING TWO YEARS.
   2.  "EMPLOYEE"  SHALL MEAN ANY INDIVIDUAL WHO IS EIGHTEEN YEARS OF AGE
 OR OLDER, WHO IS EMPLOYED BY AN EMPLOYER, AND WHO EARNED  WAGES  WORKING
 FOR AN EMPLOYER IN NEW YORK STATE DURING A CALENDAR YEAR.
   3.  "PROGRAM  ADMINISTRATOR" SHALL MEAN THE AGENT, AS DETERMINED BY AN
 EMPLOYER, RESPONSIBLE FOR THE MAINTENANCE  AND  MANAGEMENT  OF  FLEXIBLE
 SPENDING  ACCOUNTS  AS  AUTHORIZED  IN  SUBDIVISION  ONE  OF SECTION TWO
 HUNDRED FORTY-SIX OF THIS ARTICLE.
   § 246. DEPENDENT CARE FLEXIBLE BENEFITS. 1. EACH EMPLOYER SHALL ESTAB-
 LISH A DEPENDENT CARE FLEXIBLE BENEFITS PROGRAM FOR THE DEFERMENT  OF  A
 PORTION  OF  ITS  EMPLOYEES'  COMPENSATIONS INTO DEPENDENT CARE FLEXIBLE
 SPENDING ACCOUNTS CONSISTENT WITH SECTION 129 OF  THE  INTERNAL  REVENUE
 CODE  AND  REGULATIONS  ADOPTED  PURSUANT  THERETO,  AND  IMPLEMENT SUCH
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14282-02-5
 S. 8697                             2
 
 PROGRAM.  THE PROGRAM ADMINISTRATOR SHALL PRIORITIZE  THE  DISSEMINATION
 OF  SUCH PROGRAM ON AN ANNUAL BASIS AND SHALL DOCUMENT THE COMMUNICATION
 IN AT LEAST THREE DIFFERENT MODES.
   2.  AT  THE  REQUEST  OF  AN  EMPLOYEE,  AN EMPLOYER SHALL, BY PAYROLL
 DEDUCTION, DEFER THE PAYMENT OF PART OF THE COMPENSATION OF SUCH EMPLOY-
 EE AS PROVIDED IN A WRITTEN STATEMENT BY SUCH EMPLOYEE FOR  THE  PURPOSE
 OF  ESTABLISHING  AND  MAINTAINING  A  DEPENDENT  CARE FLEXIBLE SPENDING
 ACCOUNT AS AUTHORIZED UNDER SUBDIVISION ONE OF THIS SECTION,  AND  SHALL
 TRANSFER THE AMOUNT SO DEFERRED TO THE AUTHORIZED PROGRAM ADMINISTRATOR;
 PROVIDED,  HOWEVER,  THAT  THE  AMOUNT  SO DEFERRED SHALL NOT EXCEED THE
 AMOUNT ALLOWED BY SECTION 129 OF THE INTERNAL REVENUE CODE.
   3. MONEYS HELD IN DEPENDENT CARE  FLEXIBLE  BENEFITS  ACCOUNTS  ESTAB-
 LISHED  PURSUANT TO SUBDIVISION ONE OF THIS SECTION FOR THE EMPLOYEES OF
 EACH SUCH PARTICIPATING EMPLOYER SHALL BE HELD BY THE  PROGRAM  ADMINIS-
 TRATOR  AS  AGENT  FOR THE PARTICIPATING EMPLOYEE AND SHALL BE ACCOUNTED
 FOR SEPARATELY AND SHALL  REMAIN  THE  PROPERTY  OF  SUCH  PARTICIPATING
 EMPLOYER.    NOTWITHSTANDING ANY LAW TO THE CONTRARY, MONEYS MAY BE PAID
 OUT OF SUCH ACCOUNTS WITHOUT ANY APPROPRIATION BY LAW. ALL  PAYMENTS  OF
 MONEYS  FROM  SUCH  ACCOUNTS  SHALL  BE MADE ONLY IN ACCORDANCE WITH THE
 FLEXIBLE BENEFITS PROGRAM AUDIT OF THE STATE COMPTROLLER. ANY UNEXPENDED
 BALANCES IN SUCH ACCOUNTS AT THE END OF A PLAN YEAR AS SUCH TERM  IS  SO
 DEFINED BY THE INTERNAL REVENUE SERVICE SHALL BE RETURNED TO THE CONTROL
 OF THE PARTICIPATING EMPLOYER.
   4. TO THE EXTENT PERMITTED BY SECTION 125 OF THE INTERNAL REVENUE CODE
 AND  REGULATIONS  ADOPTED  PURSUANT  THERETO,  ANY SALARY DEFERRED BY AN
 EMPLOYEE UNDER A FLEXIBLE BENEFITS PROGRAM ESTABLISHED PURSUANT TO  THIS
 SECTION  SHALL BE CONSIDERED PART OF ANNUAL COMPENSATION FOR THE PURPOSE
 OF COMPUTING RETIREMENT BENEFITS.
   § 2. This act shall take effect immediately.